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How Do You Determine and Prioritize Your Saving Goals?

Hi readers. It’s been a few days since I posted my last post. I’m afraid life and my laziness got in the way.

Just a quick update: Challenges on marital finances are still being worked out slowly. We talked about it, and came to the conclusion that we don’t want money to get in our way of happiness. We are happy with our life, and will try to figure it out as we go. As much as I want him to get involved in our finances, it stresses him out, so it’s going to take a little push here and a lot of magic to get him to start looking at our finances.

Today, I wanted to tackle some thoughts on saving goals. Ever since we started thinking about buying a house, I have been running numbers in my head. Questions like how much house can I afford, how much will our down payment be, location of our house, etc have been popping in my head! Every time I run the numbers, my head feels like it’s going to explode! You might be wondering why? After all, I am a personal finance blogger and it should be easy for me to advocate saving for a down payment, and lowering expenses to increase savings. Honestly, I often wonder how some personal finance bloggers do it because when I think of the minimum $30,000 we need for our down payment, my stomach does a flip.

Then, I think about maxing out my 401K ($17500), maxing out both our ROTH IRAs ($10,000), contributing to FSA for medical expenses like braces ($2,000), paying down car loan (-$4,000), saving for down payment ($30,000), vacation fund ($5,000) and contributing to an after tax account for investments ($????). Did I mention, we like to live our life! We are not extremely frugal by any means. Those are just some of the goals we would like to achieve in 2013. Are they do able? I have no idea. Honestly, they seem super aggressive to me.

I have read a lot of how to guides on how you can save, etc. But honestly, I like hearing about how people do it. Let me know your story.

14 responses to “How Do You Determine and Prioritize Your Saving Goals?”

I try not to get bogged down about all our goals. You guys make a decent amount of money and you seem to be able to save a ton. If buying a house was a top priority for me, I would cut back on some of the retirement stuff until we could save enough for a down payment. We’re not nearly able to reach our savings goals though because my husband is still working on his career and there’s only SO much I can do on my own. SO I try not to stress about it, knowing that when my husband get s hired, all our goals will move at a faster pace since we can save more.

We’ve got some pretty aggressive goals – but that doesn’t mean they’re not do-able. I wouldn’t forsake the IRAs or the 401Ks – but definitely think about seeing what you can do to cut back for a year or 18 months to hit the big audacious goals. Are the goals outside the realm of possibility or are they just a challenge you both can rise to meet?

I think we can almost reach our goals in 2013 with our projected income.
The challenge is prioritizing. We should max out my 401K to avoid getting hit with hefty taxes. But then it gets to the point, do we want a house that bad that we want to save less in our ROTHs? Or do we want to max out our ROTHs in 2013, go on vacation, and then, save the rest for a down payment? Decisions, decisions.

We look at what’s most important to us and work from there. I’d agree that I wouldn’t forsake retirement accounts. Really, we look at the fact that some goals just take time and be disciplned to reach them. What really helps us is once we have the goals established, we automate as much as we can so it’s done and we don’t have to “feel” it.

That’s a great philosophy. Honestly, buying a house is not in our wish list. We want to travel and invest $$$. However, renting is more expensive than paying a mortgage in Texas. Financially, long term buying a house would make more sense.

The bunnies in a cup definitely got my attention I’ll tell ya that! For me I just wrote a list of my savings goals, made a budget, and stuck to it. What’s best, just like paying down debt, is to try to accomplish the smallest one first, then you’ll feel pumped to accomplish the next goal. It works for me at least. And being patient too, that helps lol.

My first year out of college, cash savings were my main priority because I wanted to buy a car. I put enough into my 401(k) to get the match and maxed out my Roth IRA and I was able to buy a car and build up a solid emergency fund.

Once I bought my car, my cash savings were now titled “down payment savings”. I debated how soon life-wise I wanted to buy a house and decided it was pretty far out (> 5 years), so I decided on a % of my gross income to invest (20%) in whatever vehicles that added up to (401(k), Roth IRA, and taxable) and put the leftover money into cash down payment savings.

It’s about priorities, figuring out how much you can afford to save for the year and divvying that money up between buckets. Say you can save $50,000 for the year and your down payment goal is $30,000 and that’s your first priority, then you have $20,000 to put towards the other goals. If buying a house isn’t a priority life-wise, then I would max out your retirement accounts AND THEN pile money into cash for a down payment. I promise, it will be here sooner than you think!

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I am 22 year old "Gen Y" living in Dallas, Texas. I have my B.S. Global Business and M.S. Supply Chain, and I am currently working on my MBA. As I navigate the grown-up world, I am constantly trying to balance my life, career, and money.